The prospect of a Donald Trump victory at next week’s U.S. election has weighed heavily on international markets this week. So much so the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) plunged as much as 1.5% at one point on Wednesday.
Following the shock Brexit vote, it would appear as though investors are not taking any chances this time and have been preparing for a surprise Trump win.
Some investors have been going to the safe haven of gold, much to the delight of shareholders of gold miners such as Resolute Mining Limited (ASX: RSG). Others have been exiting positions in high-quality companies, driving their share prices lower.
Whilst this is not at all great to see, it has potentially thrown up a few bargains for investors to jump on in my opinion. When the dust settles I believe these three shares would be great investments:
Appen Ltd (ASX: APX)
The shares of this leading language services and technology company have fallen over 15% in the last 30 days. A good portion of this came on Wednesday when its shares fell almost 7% to $2.79. I believe when markets find their feet again, Appen would be a great long-term investment. Especially now its shares are changing hands at just 20x estimated FY 2017’s earnings.
Retail Food Group Limited (ASX: RFG)
The master franchisor of popular brands such as Gloria Jean’s, Donut King, and Michel’s Patisserie saw its share price fall almost 6% on Wednesday. This could make Retail Food Group a bargain buy now in my opinion. Not only are its shares changing hands at a reasonable 15x full year earnings, but it is expected to provide a fully franked 4.7% dividend in FY 2017. That’s great value when you consider it grew net profit by 20% to $66.4 million this year and is expecting similar growth in FY 2017.
Webjet Limited (ASX: WEB)
Webjet’s shares fell an incredible 11.5% on Wednesday despite there being no news out of the online travel agency. Although Qantas Airways Limited (ASX: QAN) reported a weak first quarter on Monday, it was in-line with previous guidance. So I don’t believe the sell-off is related to any concerns over weaker demand in the industry. In my opinion it is likely to be a spot of profit taking. After all, its shares had almost doubled in value (in around one year) up until this week.
If you need to make room in your portfolio I would highly recommend selling these rotten ASX shares before they harm it. Are they in yours?
After a double-digit rally for the ASX since 2016 lows, investors should be on high alert. You’ll find a full rundown below of 3 shares we think you should avoid today plus one top pick worth buying, even if the market turns south and the RBA keeps rates at an “emergency low.” Simply click here to uncover these stocks.
Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia owns shares of Retail Food Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.